Translated French Cases and Materials under the direction of Professor B. Markesinis and M. le Conseiller Dominique Hascher

Translated by:

Tony Weir

Copyright:

Professor Basil Markesinis

In view of article 1129 Code civil:

Given that this text requires that in order
for a contract to be valid the amount of the object of the obligation in
question must be determinable;

Given that
the judgment under attack found that in return for loans made respectively
by the firm Brasserie Léopold and the firm A Bertrand, guaranteed by
Levêque,
M. and Mme Gilles bound themselves and the firm La Bourgogne, of which M. Gilles
was managing director, to see that only beers produced by the Brasserie Léopold
and sold by Bertrand be sold in their public house up to a minimum of 200 hectolitres
for each of six years, at the end of which the loans were to be repaid; the contract
was extensible for at least three years with an annual minimum throughput of
3,000 hectolitres, but was silent as to the price of the beer to be delivered,
that being left to the discretion of the brewery or its distributor;

Given that
the decision below, reversing the decision at first instance, held that the
contract was valid notwithstanding the absence of any fixed or determinable
price as this was not a contract of sale but rather a contract whereby M. and
Mme Gilles undertook in return for the loan to process in their establishment
a certain quantity of Léopold’s beer and to procure it from Bertrand,
a third party and an independent legal person, and that the obligation to repay
the loan was quite independent of the obligation of exclusivity contained in
the same contract;

Given that in so deciding when there was no provision in the
contract which fixed or rendered determinable the price payable for the series
of deliveries of beer
with the result that the obligation to buy the beer exclusively from the brewery
or its distributor imposed “by reason of the loan” was purely facultative
as to the latter in granting them the ability to sell at whatever price they
chose, the Court of Appeal violated the text cited.

For these reasons, QUASHES
the decision rendered on 27 June 1979 by the Court of Appeal of Versailles
and remands the case to the Court of Appeal of Rouen.

Subsequent Developments

Com, 27/04/1981, Bull. IV, n°
189 : Position abandoned in the judgements of the Assemblée
Plénière of 1 December 1995 cited above, the Cour de Cassation
stating on that occasion that “Article 1129 is not applicable to the
determination of the price”. Although Article 1591 of the Civil Code,
which provides that “the sale price must be determined and indicated
by the parties” continues nevertheless to apply to commercial sales,
breaches of this rule are sanctioned, not by nullity of the contract, but
under the principle of good faith in the performance of the latter, and,
as a consequence, by rescission or indemnification.